Driller to pay regulators $5.1 million over bribery allegations

Oil driller Layne Christensen Co. on Monday reached a $5.1 million settlement with federal regulators to pay fines and relinquish profits over allegations it bribed foreign officials in Africa.

The Securities and Exchange Commission alleged that The Woodlands-based company had spent nearly $800,000 to pay off foreign government officials in Mali, Guinea and the Democratic Republic of the Congo, dealings that earned it $3.2 million in improper tax savings over five years.

The company, according to the SEC, also violated the Foreign Corrupt Practices Act when it made improper payments to customs officials and paid more than $23,000 in cash to police, border patrol, immigration officials and labor inspectors in several African countries "to obtain border entry for its equipment and employees."

Smaller payments it made to customs officials and clearing agents in Tanzania, Mali and elsewhere added up to $10,000 between 2007 and 2010, the regulators said.

The SEC said the company consented to the charges without admitting or denyingthe SEC's findings.

"Layne's lack of internal controls allowed improper payments to government officials in multiple countries to continue unabated for five years," Kara Brockmeyer, chief of the SEC enforcement division's Foreign Corrupt Practices Act unit, said in a written statement.

Layne Christensen did not immediately respond to a request for comment.

The water management, construction and drilling company moved its headquarters from Kansas to The Woodlands in 2012. It had 4,100 employees around the world at the end of last year, according to regulatory filings.

The $5.1 million agreement is small compared with oil field service giant Weatherford International's more than $250 million settlement with the SEC last year to resolve claims it had authorized bribes and improper travel and entertainment for foreign officials in the Middle East and Africa. French oil giant Total last year had agreed to pay nearly $400 million to settle SEC charges over alleged violations in Iran.

But in calculating Layne Christensen's fines, the SEC said it took into account that the company had taken several remedial steps to prevent bribery from happening again.

It had conducted an internal investigation when it learned of the potential violations several years ago, hired a chief compliance officer and conducted extensive due diligence of other companies with which it does business, among other remedial steps, the regulators said.

The SEC said the company will disgorge $3.9 million in profit plus $859,000 in prejudgment interest, and it will pay $375,000 in penalties.

Energy reporter for the Houston Chronicle. Houston native. Former banking and finance reporter.

Prior to joining the Houston Chronicle, Collin Eaton covered the local banking and finance scene at the Houston Business Journal. Before that, he held internships at newspapers in Texas and Washington D.C., generally writing about business, money or higher education. He graduated from the University of Texas at Austin in 2011.